Chile's PAL Airlines To Drop Mining Charter Operations18th Aug 2014
The financially-troubled PAL Airlines has finally abandoned its charter service to mining towns and cities to focus instead on its regular scheduled service. However, the suspension of service is said to be temporary as the carrier is undergoing a restructuring program.
PAL Airlines has been struggling financially in the recent years, that it prompted the management to restructure the airline to stem its losses and lighten its debt load.
According to the country's major broadsheet, El Mercurio, the decision by the management to suspend its charter service to mining destinations was purely economic, reflecting the country's anemic economy.
The unfavorable business climate in the country's commercial aviation industry was also partly blamed on the government's lack of support for the local carriers. The government has granted foreign carriers domestic traffic rights enabling them to fly between domestic points, yet the mother country of these carriers don't have the same reciprocity to Chile's airlines.
The airline has accumulated a total debt of USD$10 million and has opened up its MRO base to other carriers allowing it to diversify its source of income.
The airline is even entertaining extreme measures like the possibility of giving up its air operator's certificate (AOC) and selling its brand to interested investors in the aviation sector.
The government has just issued a suspension order to PAL Airlines to cease operations after the country's civil aviation authority (Dirección General de Aeronáutica Civil—DGAC) discovered the airline to have defaulted its payment on the passenger embarkation taxes among other charges.